Time value of money calculations are vital to wealth management and financial planning, but they are also useful in everyday life. If you would like to calculate how much a potential car payment might be or whether or not you are saving enough to put your child through college, you can use time value of money calculations to help with the estimation.
Check out how to use Excel to calculate present and future values:
How much will you need for retirement? There’s more to consider than just life expectancy! A single 25 year old willing to accept quite a bit of investment risk has very different financial goals than a 50 year old single mother of three. The retirement goals of individuals vary dramatically with age, risk preference, income, and a host of other factors. There many questions an investor must ask himself along the way, so walk through the following tutorial to see how many of these you have actually asked in your own retirement planning:
How much will an investment account in which I contribute monthly be worth when I retire? This might be one of the most important questions we have regarding our 401k or investment contributions. How much more will we have when if we invest 8 percent rather than 3 percent? How much more will we have if we returns are 10 percent rather than 5 percent? These questions can be answered by calculating future value under different scenarios. Check out the following video to learn how to do this!
Check out the consumer confidence index. The index is a composite measurement of consumers’ outlook on areas of the economy such as business conditions, household income, and the labor market.